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2024 (9) TMI 378 - HC - GSTRefund of IGST - goods exported out of India - Zero Rated Supplies - claiming higher rate of duty drawback on IGST refund eligibility - HELD THAT - The issue involved in the present Petition is no longer res integra and is covered by various judgements referred to by the parties. These judgements have been passed on facts which are almost identical to the facts in the present case. These judgements have considered the statutory provisions like Section 16 (3) (b) of the IGST Act, Section 54 of the CGST Act and Rule 96 of the CGST Rules. These judgements have also considered the various notifications and circulars referred to hereinabove. After considering these statutory provisions, notifications and circulars, these judgements have passed orders based on the factual scenario in each case. In Sunlight Cable Industries (Supra), Gujarat Nippon International Pvt.Ltd. (BHC) 2023 (7) TMI 160 - BOMBAY HIGH COURT , M/S. JAYSONS EXPORTS VERSUS UNION OF INDIA 2022 (10) TMI 1259 - GUJARAT HIGH COURT , Awadkrupa Plastomech Pvt.Ltd. 2020 (12) TMI 1116 - GUJARAT HIGH COURT , Gujarat Nippon International Pvt.Ltd. 2022 (5) TMI 1138 - DELHI HIGH COURT and in TMA International Pvt. Ltd. 2019 (12) TMI 1268 - DELHI HIGH COURT , the Courts have held that, if the rate of drawback under column A and column B is the same, then, in such a situation, refund of IGST has to be ordered even if the party selects column A , as, because the rates are identical, by selecting column A the party does not get any double benefit. In the present case, the Petitioner has selected Column A and claimed drawback at a higher rate on its own volition. It is not the case of the Petitioner that it had selected column A and claimed drawback at a higher rate due to some mistake. The Petitioner will be entitled to refund of IGST after deducting the differential amount of duty drawback - Respondents are directed to grant refund of IGST paid on the goods exported by the Petitioner after deducting the differential amount of duty drawback, within 12 weeks of the date of this order, along with interest at the rate of 7% p.a. on such refund from the date of the shipping bill till the date of actual refund - Petition allowed.
Issues Involved:
1. Eligibility for refund of IGST paid on exported goods. 2. Impact of claiming higher rate of duty drawback on IGST refund eligibility. 3. Application of relevant statutory provisions, notifications, and circulars. 4. Compliance with procedural requirements for IGST refund. 5. Judicial precedents on IGST refund and duty drawback. Detailed Analysis: 1. Eligibility for Refund of IGST Paid on Exported Goods: The Petitioner exported stainless steel articles and paid IGST on these exports, as detailed in the provided table. Under Section 16 of the IGST Act, 2017, exported goods are considered "Zero Rated Supplies," making the exporter eligible for a refund of IGST paid, as per Section 54 of the CGST Act, 2017. The Petitioner argued that the shipping bills should be treated as applications for refund under Rule 96 of the CGST Rules, 2017, and that the refund should be credited directly to their bank account. 2. Impact of Claiming Higher Rate of Duty Drawback on IGST Refund Eligibility: The Petitioner claimed a higher rate of duty drawback by selecting Column "A" instead of the lower rate in Column "B." The Respondents argued that this disqualified the Petitioner from receiving an IGST refund. The Petitioner contended that Section 54 (3) of the CGST Act restricts refund of unutilized input tax credit when higher duty drawback is claimed, but this restriction does not apply to IGST refunds under Section 54 (1). 3. Application of Relevant Statutory Provisions, Notifications, and Circulars: The Petitioner complied with the conditions of Notification No. 131/2016-Cus. (N.T.) and Notification No. 73/2017-Cus. (N.T.), which require a declaration regarding non-availment of IGST credit. The Petitioner argued that these notifications and Circular No. 32/2017 and Circular No. 37/2018 should not prevent the IGST refund, as they had not availed input tax credit. 4. Compliance with Procedural Requirements for IGST Refund: The Petitioner had filed GSTR-1 and GSTR-3B on time, fulfilling the procedural requirements for claiming the IGST refund. Despite this, the refund was not credited, leading to multiple requests and eventually a legal petition. 5. Judicial Precedents on IGST Refund and Duty Drawback: The Petitioner cited several judgments, such as Sunlight Cable Industries, Gujarat Nippon International Pvt. Ltd., and others, where courts allowed IGST refunds even when higher duty drawback was claimed, provided the differential amount was paid back or deducted from the refund. The Respondents cited contrary judgments but acknowledged that the differential drawback should be paid back if IGST refund is claimed. Conclusion: The court noted that the issue is well-settled by various judgments. If the rate of drawback under Column "A" and Column "B" is the same, refund of IGST should be ordered even if Column "A" is selected. In cases where the higher rate is claimed, the refund of IGST can be granted after deducting the differential amount of duty drawback. Order: a. The Respondents are directed to grant the refund of IGST paid on the exported goods after deducting the differential amount of duty drawback within 12 weeks, along with interest at the rate of 7% p.a. from the date of the shipping bill to the date of actual refund. b. The Order dated 6th October 2023 is modified accordingly. c. Rule is made absolute in these terms. d. No order as to costs.
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